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How "Add-Backs" Can Increase Your Exit By Millions

Author

Aiza Torres
June 05, 2025

In this week's issue, we're covering: 

  • How “add-backs” can boost your exit valuation

  • A guide to selling your E-commerce business

  • A $1B acquisition that highlights the power of franchising

  • A personal insight from me on life after an exit

Let’s dive in.

🧠 This Week’s Big Idea 

How "Add-Backs" Can Increase Your Exit By Millions

Most founders don’t realize they can increase their business valuation without actually increasing revenue. And it all comes down to something called "add-backs."

"Add-backs" are adjustments made to your financials that reflect the true profitability of your business. Buyers use them to calculate adjusted EBITDA, which is often the basis for your multiple.

But the problem is, a lot of founders under-report them (or miss them entirely).

Here are a few common examples:

  • One-time expenses: Legal fees, one-off consultants, or COVID-related costs

  • Owner perks: Personal travel, meals, and vehicles – if the business paid for it, flag it.

  • Non-essential roles: Your cousin who’s on payroll but doesn’t actually work there? Add-back.

  • Growth investments: Experimental marketing or one-off tech spend that won’t repeat

When done right, add-backs can increase your EBITDA by 10–30%. And when you’re selling at a multiple, that impact compounds... fast.

For example, at a 7x multiple, an extra $100K in add-backs can equate to $700K more on the sale price.

Yes, they're worth taking seriously. But it has to be defensible, because buyers won’t accept vague math.

So start building your add-back list early with help from a financial advisor who understands deals.

It’s one of the easiest ways to add value to your valuation without adding complexity. 

 Curious What Buyers Would Actually Pay for Your Business?

Most founders undervalue what they’ve built or don’t realize which parts of the business turn buyers off.

 But with a Certified Pro Valuation, we’ll help you:

  • Spot weak points before buyers do

  • Understand what your business is really worth in today’s market

  • Get a short list of real buyers who are actively looking in your space

“Exitwise helped us turn an average offer into something life-changing.”

— Shawn McKenna, Founder, DataFuzion

Special offer for readers: Get 10% off your valuation today. Just use the code VALUE10 when booking your call below.

 📰 Featured Blog Post

[10 Steps] Sell E-commerce Business - Steps and Valuation Explained

Thinking about selling your E-commerce business? We've got everything you need to know.

This guide walks you through: 

  • Preparing your financials for buyer scrutiny

  • Navigating the sales process from start to finish

  • Understanding valuation drivers specific to E-commerce

📰 In The News

Dave’s Hot Chicken Acquired by Roark Capital for $1 Billion

Dave’s Hot Chicken, the fast-casual chain known for its Nashville-style hot chicken, has been acquired by private equity firm Roark Capital in a deal valued at $1 billion.

Founded in 2017 as a pop-up in a Los Angeles parking lot, the brand has rapidly expanded to over 300 locations and plans to surpass 400 by the end of 2025.

Why it matters to you:

This acquisition underscores the appetite for scalable, franchise-driven businesses with strong brand identity.

If your business model includes franchising or has the potential for it, now might be an opportune time to explore growth or exit strategies.

Interested in learning more? Get in touch with Exitwise.

🗣️ From Brian

After exiting my previous company, I thought I’d feel nothing but relief.

Instead, I found myself asking, "What now?"

The emotional journey post-exit is real (and often unexpected).

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 That's all for this week. Until next time.


Best,
Brian